Everything we know so far about how Trump’s tariffs will impact your pension | UK | News

US President Donald Trump’s announcement on trade tariffs has left global stock markets reeling, in the UK the FTSE 100 fell over 6% at one point which meant at one point £100 billion was wiped off the value of some of the UK’s largest companies. But, unless you are a saver needing to take your cash out of shares for an emergency then the stock market turmoil is unlikely to affect you too much, according to pension experts. They have explained to the Daily Express why savers need to hold tight.

A good example of just how fortunes can change is that at close of trading on Monday, analysts at Barclays were reported as upgrading their position on the FTSE 100 to ‘overweight’ – which means they want to buy more shares, not less.

City AM reported that despite suffering its worst two-day trading period since the pandemic, London’s blue-chip index has outperformed its international peers in recent days falling just under 10% since Trump’s ‘Liberation Day’ speech.

Barclays said firms in the FTSE 100 were less exposed to macroeconomic trends, so it could hold up comparatively well in an era of stagflation. Considering that the FTSE 100 is where many pension funds invest their cash on behalf of savers that could offer Brits some good news.

If you are an older saver with an eye on retirement then there may be other good news. Lily Megson, policy director at My Pension Expert explains how your pension cash may no longer be invested in shares anyway.

Although it means the money does not have the same potential to grow, this investment strategy known as lifestyling means that over 50s often have their pension cash shifted by fund managers into safer bonds or gilts.

Megson said: “Many pension schemes already reduce risk as retirement approaches, and those earlier in their journey still have time to ride out the ups and downs. The most important thing is to stay focused on the bigger picture.”

If you are in a defined benefit scheme or a so-called final salary scheme, your pension payments are guaranteed. The state pension is also paid out regardless, as it is funded by current National Insurance payments and tax.

If you have a self-invested personal pension, where you choose which shares and funds to invest in, then it is likely your savings will have taken a hit.

However, if you are not needing to take your savings immediately then you could also benefit from stock market falls

This is because stock market dips are when asset managers can go in and buy up bargains. Rolls Royce shares were trading 6% lower, but very few analysts will be actively telling investors to sell their shares in the company.

Scott Gallacher, director at Rowley Turton, said markets have reacted sharply to Trump’s surprise tariffs – but this isn’t a financial crisis or a pandemic.

“It’s a political shock, and markets tend to recover from those far more quickly. We saw similar market drops during the dotcom crash, the 2008 banking crisis, and the COVID-19 pandemic – yet those who stayed invested in well-diversified portfolios came through the other side unscathed.

“It’s unsettling in the short term, but not a reason to panic.”

Gallacher added: “For those still paying into their pensions – which is the vast majority – these market falls are effectively a bargain. Your regular contributions are buying more for less, which can deliver a long-term boost as I’m sure markets eventually recover.”

Riz Malik, independent financial adviser at R3 Wealth, said reassuringly many pension funds are well diversified so won’t have mirrored the full market downturn. He said: “Some fund managers were already underweight equities ahead of Liberation Day, which helped cushion the blow.”

Harry Mills, director at Oku Markets said: “Pension funds are inherently diversified and managed with the long term in mind. Risk exposure is tailored to your stage in life, meaning younger savers typically have more growth-focused investments, while those nearing retirement are generally positioned more conservatively. As the saying goes, ‘Time in the market beats timing the market.’

“Volatility is a natural part of investing, and those saving for the long term should be used to such ups and downs, but pensions are a marathon, not a sprint. Rather than being glued to the charts, enjoy this spell of pre-summer sun while we have it, and let the professionals manage the details.”

Gabriel McKeown, head of macroeconomics at Sad Rabbit, said: “First and foremost, it’s important to remember that despite the global instability, this isn’t the end of your pension, it’s just the beginning of a more complicated chapter.

“The UK market in particular, isn’t falling due to changing fundamentals, but is instead capitulating under the weight of a structural repricing in the global market as we enter a potentially post-globalisation world.

“Furthermore, for those with institutional pension schemes, these are nowhere near as fragile as they may look, with most large schemes having built significant collateral buffers since 2022 and remain in surplus, thanks in part to more substantial funding levels and the decline in liabilities caused by higher discount rates. Additionally, most schemes won’t be forced sellers, as while mark-to-market losses are real, they are not crystallised unless assets are liquidated prematurely, and trustees can afford to take a long view, if cashflow requirements remain manageable.”